STATUTORY COMMISSIONS (CAG)

STATUTORY COMMISSIONS (CAG) 

Introduction

1. Art 148
1. Appointed by President by warrant under his hand and seal and removed by the process of judge of SC
2. Salary and advantages should not be revised to his disadvantages during his term
1. To be decided by parliament
3. Not eligible for any office under Government of India  or State Govt
4. Salary and funds charged on Consolidated fund of India
2. Art 149
1. Duties and power
2. Determined by parliament
1. Until then as was done before the commencement of constitution with regard to account of provincial govt and central govt
3. Art 151
1. The report of CAG be submitted to president who shall lay it on the house of parliament
2. The report of CAG wrt state govt shall be submitted to governor who will lay it on legislature of state
4. Introduced by Government of India 1919
5. Law by parliament introduced in 1971
6. Function is to analyse tax receipt and expenditure
7. Reports are sent to Public Accounts Committee (PAC) which prepares final report
8. CAG sends parliament which sends it to PAC which sends it to govt
9. Govt not bound by recommendation

Issues and challenges

1. Ambedkar: most important office since guardian of public purse
2. Appointment
1. Appointed by President on the advice of CoM
2. No role of legislature
3. Issue of conflict of interest
4. eg- Shashikant Das in 2013 who was in defence ministry
5. Way forward
1. 2nd ARC: bipartisan, multi-membered body with role of opposition
2. Amitabh Mukopadhyay: book- Rethinking Public Institutions in India
1. PAC must also be consulted while appointing the CAG
3. Scope of CAG audits
1. Currently performs compliance audits, financial audits, performance audits
2. Developed countries auditing institution focus more on performance audit, developing countries' Supreme Auditing Institutions focus more on financial and compliance audits
3. Performance audit look into 3 Es: efficiency, effectiveness and economy of govt expenditure
4. Challenges: 
1. Handle criticism of its performance audits especially when findings are critical of govt policies
2. Potential scope of audit of private companies which provide services under a PPP model or are in revenue sharing model with govt
3. SC: Association of Unified telecom services Vs UoI Case 2014: CAGs jurisdiction over private companies if and when directed by govt
4. eg- AAP govt in 2014 asked CAG to audit DISCOM
4. Quality of audits
1. CAG submitted itself to a peer to peer assessment conducted by INTOSAI: International Organisation of Supreme Auditing Institutions in 2012
1. 50% of reports could have been more balanced
2. 50% of reports lack evidence
2. Despite, the reports have been found valuable and authoritative by PAC and Committee on Public Undertakings
3. INTOSAI recommended more frequent peer-to-peer review
5. Delay in tabling of CAG report
1. Often done by ruling party to avoid embarrassment
2. Way forward
1. 2nd ARC and PAC asked for time bound procedure for tabling CAG reports and PAC findings preferably within a year in parliament

 

Challenges before PAC

1. Mini-parliament
2. Scrutinise CAG reports, provides more informed view to parliament
3. Challenges
1. Limited tenure of 1 year. not enough for 1st time members
2. Proceedings of PAC are not in open
3. No time limit to table the report

Way forward

1. Implementation of the CAG report doesn't take place
2. BP Mathur;- book: Re-engineering CAG of India: 
1. Pre-procurement audit of defence procurement since they are often blamed for corruption